To resolve the current housing crisis, reports estimate that we need to build and repair 1.1 million housing units across the country by 2030. Adding to that challenge are climate risks like extreme heat, flooding, and wildfires that have already cost the country over $3 billion annually. Build Canada Homes (BCH), a new federal initiative, can help to address this crisis from both sides.
To be successful, BCH must learn from the past, pull together public and private financing, and build homes that will withstand future climate challenges.
Learning from history
In the 1940s, hundreds of thousands of homes were built from pre-approved designs to address housing shortages, known as ‘strawberry box’ homes. Those homes built in the forties, followed by the massive boom of new social housing built in the 1970s, succeeded in delivering rapid affordable housing to fill temporary gaps. While those homes met urgent needs, they were cheaply built and poorly insulated, leaving families vulnerable to high energy costs and climate impacts. Today, we have better tools.
Recently, the federal government and CMHC have developed a national housing catalogue inspired by the ‘strawberry box’ homebuilding system. New construction should utilize green construction methods, sustainable materials, and energy-efficient design. To make the most of our existing buildings, we must integrate deep energy retrofits to improve conditions and lower energy bills. By prioritizing sustainable buildings, we ensure that we lock in energy affordability, while reducing the need to repair buildings over time. These are the buildings that will provide stable homes for residents well into the future.
Scale of the opportunity
It’s estimated that the 1.1 million housing units that need to be built across the country will cost $62.6 billion, and that’s assuming they’re built to lower efficiency standards. As new housing initiatives roll out, integrating air-tight building envelopes and low-carbon materials is key to long-term affordability.
Green construction and deep retrofits may come at an upfront cost, but are more cost effective over time through reduced energy bills. BCH recognizes this, with $25 billion in financing and workforce development to support modern construction methods like prefabrication and 3D-printed building designs. This investment and recognition from the federal government is essential to helping to scale these industries so that they are well-supported for future housing initiatives. It’s also promising to see that BCH will prioritize co-ops, non-profits, and Indigenous housing providers.
Several programs already support sustainable housing:
- CMHC Canada Greener Affordable Housing Retrofit Program
$1.1B in loans and grants for community housing and Indigenous governments.
- Green Municipal Fund’s Sustainable Affordable Housing Program
$300M for non-profit and municipal retrofits, active until 2026.
- Housing Accelerator Fund
$4B for municipalities and Indigenous governments, informed by leading climate organizations.
- Green and Inclusive Community Buildings Program
$2B for public building retrofits through 2029.
- Canadian Infrastructure Bank Building Retrofits Initiative
Finances retrofits for industrial, commercial, and multi-residential buildings.
- Deep Retrofit Accelerator Initiative
Supports retrofit accelerators for mid- to high-rise residential buildings.
Unlocking private capital
While the scale of public funding offered by BCH is a welcome investment, it alone won’t close the housing gap. RBC estimates a $2 trillion shortfall over five years. To reach the scale of new, affordable, and green housing needed, Canada will need to tap into private capital, too. The U.S. Low-Income Housing Tax Credit model offers a proven solution, attracting $5 in private capital for every $1 in tax incentives. Its success lies in strict affordability standards and long-term compliance.
To complement BCH, Canada is planning to bring back a tax incentive introduced in the 1970s called the Multiple Unit Rental Building (MURB) cost allowance. It permitted retail investors to claim tax deductions. As policymakers consider reviving the MURB cost allowance, they must tie incentives to sustainability, affordability, and construction quality. The units that are financed through this program should prioritize long-term resilience.
A systems-level approach to a generational housing crisis
Canada has a rare chance to build housing that’s not only affordable but climate-resilient and energy-efficient. With smart policy, coordinated investment, and a focus on long-term value, we can create homes that meet today’s needs and tomorrow’s challenges.
Canada’s housing and climate imperatives demand rapid, coordinated, and well-targeted investment. Achieving these goals will require system-level change blending public investment, policy, and programming to mobilize private capital at scale. This is not merely an economic challenge, but a moral imperative tied to social equity, environmental stewardship, and creating a better outcome for future generations.
Learn more about what we can do:
- Read the full Built for Good report for in-depth analysis and recommendations on housing affordability targets.
- Read RBC’s private investment analysis to understand innovative financial models for housing.
- Consider connecting and learning about local or national advocacy efforts. Groups like United Way Greater Toronto, CMHC and YWCA Hamilton regularly host events, pitch opportunities, and information sessions for individuals and organizations dedicated to building solutions.
- Explore podcasts, articles and reports covering this topic to better understand the urgency of the issue: Solving Quebec’s Housing Crisis with Brique par Brique (Summer of Good)
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